Even libertarians don't want private roads

Can you ever have free-market highways?

Just missing the UK news agenda, the Atlantic has a post up on road tolls and private highways. In a reversal of the norm for discussions of high degrees of privatisation, its merely a theoritical concern for Americans, but has deeply practical relevence for Brits.

Timothy B. Lee writes:

While I'm generally sympathetic to the idea of privately-managed roads, I've become convinced that the broader vision of "free-market roads" is a conceptual confusion. In the abstract, the idea of competing, privately-owned roads has a lot of appeal. But the more I think about it, the less sense it makes. Roads are deeply intertwined with governments. They always have been and as far as I can see they always will be. This means that they'll never be truly private in the sense that other private companies like restaurants or shoe factors can be.

Assembling the land needed for a long-distance road is prohibitively expensive without government assistance. Unsurprisingly, private roads almost never come into existence without extensive government assistance. And that means that the profitability of a "private" road depends crucially on how many competing roads the government allows to exist.

Lee is no anti-privatisation zealot, either. An adjunct scholar with the high-libertarian Cato Institute, he's exactly the sort of person who would love to support the government taking a back seat on provision of transportation.

It is noteable that the government's plans don't involve large scale private road-building, but the lesser challenge of handing over the maintanence and development of existing roads to private investors on extremely long-term leases. If the private companies do so purely through existing funding, then the issue is merely one of comparative efficiency of the public and private sector, and the privatisation is just a showy, irreversible outsourcing. But if, as Cameron suggested, they are allowed to charge tolls on new capacity, then that carries additional risks.

As Lee argues, because any large scale road-building (which surely includes things like adding extra lanes to motorways, cited by Cameron as something which could be funded through tolls) requires massive public support, through use of eminent domain to assemble the land and no-compete clauses to prevent revenue streams from drying up, tolls on previously public roads represent, at least in part, a tax on mobility.

There is one key difference between the American and British contexts, though; in the UK, competition – of a sort – exists. Freight is frequently moved through the rail network as well as the roads, and shipping is far more useful in a country which is never further than 70 miles from the sea. Of course, true competition means avoiding "too-big-to-fail" scenarios; for now, the idea of reposessed roads might be a bit much to handle.

Future of British roads? A Bolivian highway. Credit: Getty

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.